Retrospective of 2015

Retrospective of 2015

Soft domestic and global economies, declining corporate revenue and earnings, China’s economic slowdown, sharp declines in oil and commodities, and the strong dollar relative to other currencies, all collectively created market volatility as well as limited and narrow investment opportunities. Actually, in 2015 cash/money market accounts had higher returns than the broad market, if we leave out dividends. With the decline in December, stocks finished 2015 on a down note: The S&P 500 lost ~ .7% (+~ 1.38% including dividends) last year – its first decline in 7 years! The DOW stocks fared even worse, down~ 2.2% (not including dividends). The technology heavy NASDAQ gained ~ 5.7% mostly due to the strong returns of the largest 100 stocks in this index, growing ~ 8.4%. Removing these 100 stocks, the NASDAQ would also be negative for the year. In fact, the significant out performance of a ~ dozen stocks including Alphabet/Google (GOOG), Amazon.Com (AMZN) and Facebook (FB), carried the market. However, with the average large and small company stocks down 4.1% and 11.2% respectively, most investors likely saw their equity portfolios fall in value. Add to this the negative return of the aggregate bond index (AGG) with the decline in high yield bonds, emerging market stocks and most international stocks, 2105 proved to be a very challenging year! Of course, portfolio performance could have been worse; Maxele’s portfolios’ generally held up well by avoiding the investment landmines of being overweight in the 2015 negative sectors such as energy (-14%), materials (-18%), and emerging markets (-17%).

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